A loosening of foreign ownership rules in the country’s real estate market should be atop the agenda of the new administration, according to a real estate analyst.
In a business forum organized by the Nordic Business Council of the Philippines (NBCP) on Tuesday, KMC Mag Group head of research Antonn Nordberg shared his wishlist for the Duterte Administration.
At the top of Nordberg’s list is the lifting of foreign ownership rules and the deregulation of capital markets.
According to Nordberg, the Philippines is in need of more foreign investments in the real estate industry in order to create more competition and as well as increase consumption.
“The real [domestic]economy cannot produce resources that are needed for production facilities,” Nordberg said in his presentation.
At the sidelines of the forum, Nordberg told reporters that a specific amendment in the foreign ownership rule that should be made is the number of years a foreign investor can lease office space in the country.
“If you don’t want to give full ownership of land, at least extend the lease for up to 100 to 150 years,” Nordberg said.
At present, foreign investors can only lease office spaces in the country for 50 years at most, according to Norberg
“It’s 25 plus 25 so it’s 50 years,” Nordberg said.
The head of research said that foreign investors who buy out leased units from previous foreign unit owners are at disadvantage.
“If you invest now in a premium office building and you only have 50 years lease, when you want to exit from your investment or you want to sell it to the next investor, there’s more risk for the next investor because the lease is shorter by ten years or more,” Norberg explained.
Aside from the amendments in the foreign ownership rules, Norberg also listed other items that he wishes the new administration would look at such as the acceleration of infrastructure spending and sustaining the current economic condition.